December 18, 2007 at 08:30 AM EST
Nastech Assigns Intellectual Property Related to the Development of RNA-Based Therapeutics to its Subsidiary, MDRNA, Inc.
Assignment of over 100 RNA-related Inventions a Key Step in Establishing MDRNA as an Independent Company

BOTHELL, Wash., Dec. 18 /PRNewswire-FirstCall/ -- Nastech Pharmaceutical Company Inc. ("Nastech") (NASDAQ:NSTK) announced today that it has assigned (i) certain Nastech licenses to third-party intellectual property and (ii) Nastech's own intellectual property, as such intellectual property relates to the development of RNA-based therapeutics, to its subsidiary, MDRNA, Inc. ("MDRNA").

"The transfer of intellectual property rights for RNA-based therapeutics from Nastech to MDRNA is an important step in the process of creating MDRNA as an independent company. We believe MDRNA independence will ultimately enhance Nastech shareholder value," stated Steven C. Quay, M.D., Ph.D., Chairman, President and CEO of Nastech. "The MDRNA intellectual property estate includes rights to patents and patent applications covering technologies for the development and delivery of RNA-based therapeutics as well as their use in treating diseases. We believe that this agreement provides a strong foundation for MDRNA and will be important in attracting external funding for MDRNA."

About Nastech's Intellectual Property (IP)

The intellectual property estate includes rights to issued and pending patent applications relating to RNA-based therapeutics which have broad claims on their development, delivery and use in treating diseases.

    The IP estate includes:
    --  the building blocks for drugs, including novel nucleotides, cationic
        lipids, and formulations;
    --  the RNA drug cargo, i.e., RISC and Dicer substrate constructs;
    --  delivery chemistry, both covalent conjugates and complexation
        reagents;
    --  and gene target inventions, predominantly cancer directed.

Nastech's own IP related to RNA-based therapeutics and diagnostics include the following published patent applications:

    --  Compositions and Methods for Lipid and Polypeptide Based siRNA
        Intracellular Delivery
    --  Compositions and Methods for Complexes of Nucleic Acids and Organic
        Cations
    --  Cationic Peptides for siRNA Intracellular Delivery
    --  Formulations for Intracellular Delivery dsRNA
    --  Compositions and Methods Employing Universal-Binding Nucleotides for
        Targeting Multiple Gene Variants with a Single siRNA Duplex
    --  RNAi Therapeutic for Respiratory Virus Infection
    --  Compositions and Methods for Complexes of Nucleic Acids and Peptides
    --  Phage Displayed Cell Binding Peptides
    --  Dry Powder Compositions for RNA Influenza Therapeutics
    --  Nanoparticles for Delivery of Nucleic Acids and Stable Double-Stranded
        RNA
    --  Method of Minimizing Off-Target Effects of siRNA Molecules
    --  Double-Stranded Ribonucleic Acid Molecules Having Ribothymidine
    --  5'-Methylpyrimidine and 2'-O-Methyl Ribonucleotide Modified Double
        Stranded Ribonucleic Acid Molecules
    --  Methods and Compositions for Enhancing Delivery of Double-Stranded RNA
        or a Double-Stranded Hybrid Nucleic Acid to Regulate Gene Expression
        in Mammalian Cells
    --  Pharmaceutical Compositions for Delivery of Ribonucleic Acid to a Cell
    --  Compositions and Methods for Enhancing Delivery of Nucleic Acids into
        Cells and for Modifying Expression of Target Genes in Cells
    --  Nanoparticles for Delivery of Nucleic Acids and Stable Double-Stranded
        RNA
    --  Compositions and Methods for Modulating Physiology of Epithelial
        Junctional Adhesion Molecules for Enhanced Mucosal Delivery of
        Therapeutic Compounds
    --  Additional pending patent applications related to RNA-based
        therapeutics that have not yet published.

Nastech is also a licensee on a non-exclusive basis to Fire and Mello (U.S. Patent No. 6,506,559) patents and patent applications describing the fundamental use of double-stranded RNA to induce RNA interference.

Nastech is the exclusive licensee in the field of influenza virus and respiratory disease for many patent applications owned by Massachusetts Institute of Technology, including the following published applications:

    --  WO2006102461 Influenza Therapeutic
    --  20060160759 Influenza Therapeutic
    --  20060058255 RNAi-Based Therapeutics for Allergic Rhinitis and Asthma
    --  WO2005085443 RNAi-Based Therapeutics for Allergic Rhinitis and Asthma
    --  20050008617 Compositions and Methods for Delivery of Short Interfering
        RNA and Short Hairpin RNA
    --  WO2004028471 Influenza Therapeutic
    --  20040242518 Influenza Therapeutic

Additionally, Nastech has exclusive and non-exclusive rights under a license in the field of dicer substrates for patent applications owned by City of Hope.

    --  20050244858 Methods and Compositions for the Specific Inhibition of
        Gene Expression by Double-Stranded RNA
    --  20050277610 Methods and Compositions for the Specific Inhibition of
        Gene Expression by Double-Stranded RNA

About Nastech's RNA-Based Therapeutics Programs

Nastech has several product candidates currently in preclinical development including programs targeting influenza and rheumatoid arthritis. Nastech has engaged in collaborations with commercial, academic and governmental organizations including an ongoing Cooperative Research and Development Agreement (CRADA) with the Centers for Disease Control and Prevention focused on evaluating RNAi therapeutics for treatment of influenza.

About RNA Interference (RNAi)

RNA interference, or RNAi, is a cellular mechanism that can be used to turn off the production of a protein by using small interfering RNAs (siRNAs). siRNAs are double-stranded RNA molecules that are able to silence a gene in a sequence-specific manner by degradation of the target messenger RNA. In the case of an siRNA directed against influenza, the target is one or more genes that encode proteins critical for viral replication. If siRNAs are successful at turning off the production of such proteins, the spread of infection would be prevented or slowed. Nastech's RNAi research and development programs seek to develop safe and effective therapeutics by identifying key protein targets, designing the siRNA that will turn off the production of the targeted proteins, and developing a formulation for the delivery of this potential new class of therapeutics.

About Nastech

Nastech is a biopharmaceutical company developing innovative products based on proprietary molecular biology-based drug delivery technologies. Nastech and our collaboration partners are developing products for multiple therapeutic areas including osteoporosis, obesity, diabetes, autism, respiratory diseases and inflammatory conditions. Additional information about Nastech is available at http://www.nastech.com.

About MDRNA, Inc.

MDRNA, a company developing innovative products based on RNA-based technologies, is a wholly-owned subsidiary of Nastech. Discovery of the biological process of RNA interference (RNAi) garnered the Nobel Prize in Medicine in 2006, and holds tremendous potential as a basis for human therapeutics. Nastech began work on RNAi in 2002 and has assigned its intellectual property, as it relates to the development of RNA-based therapeutics, to MDRNA in order to bring greater focus on the development of RNA-based technologies and enhance shareholder value arising from this exciting new field. Additional information about MDRNA is available at http://www.mdrnainc.com.

Nastech Forward-Looking Statements

Statements made in this press release may be forward-looking statements within the meaning of Federal Securities laws that are subject to certain risks and uncertainties and involve factors that may cause actual results to differ materially from those projected or suggested. Factors that could cause actual results to differ materially from those in forward-looking statements include, but are not limited to: (i) the ability of Nastech to obtain additional funding; (ii) the ability of Nastech to attract and/or maintain manufacturing, research, development and commercialization partners; (iii) Nastech's and/or a partner's ability to successfully complete product research and development, including preclinical and clinical studies and commercialization; (iv) Nastech's and/or a partner's ability to obtain required governmental approvals; and (v) Nastech's and/or a partner's ability to develop and commercialize products that can compete favorably with those of competitors. Additional factors that could cause actual results to differ materially from those projected or suggested in any forward-looking statements are contained in Nastech's most recent periodic reports on Form 10-K and Form 10-Q that are filed with the Securities and Exchange Commission. Nastech assumes no obligation to update and supplement forward-looking statements because of subsequent events.

    Contacts:
    Nastech
    Ed Bell
    Director, Investor Relations
    (425) 908-3639
    ir@nastech.com

    Russo Partners, LLC
    David Schull (Media)
    (212) 845-4271

Source: Nastech Pharmaceutical Company Inc.

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